Call That a Budget?

Last week, when House Republicans passed Paul Ryan’s budget resolution, Ryan, the Budget Committee chairman, said that Congress had a “moral obligation” to get the country’s finances under control, and that the vote was a necessary response to a looming “debt-driven crisis.” What he didn’t mention was that it was also a vote to gut the federal government.

Because Ryan presents himself as a reasonable technocrat who’s just making the tough choices that other politicians shirk, that may sound like an exaggeration. But the simple truth is that his plan is not an evenhanded attempt to solve America’s long-term budget problems. It’s a profoundly radical document, its proposals skewed by ideological biases. Raising taxes, of course, is out of bounds. The same goes for using federal power to hold down Medicare costs, which will be the key driver of future budget deficits. Instead, House Republicans would cut spending on almost everything else the government does. According to an analysis by the Congressional Budget Office, the Ryan plan would, by 2050, reduce federal spending to its lowest point, as a percentage of G.D.P., since 1951. And since an aging population, with rising health-care costs, means that a hefty chunk of government spending will be going to retirement and health-care benefits, hitting Ryan’s target would require drastically shrinking everything else.

Ryan doesn’t exactly hide his hostility to government, but he’s adept at downplaying the impact that his proposed cuts would have on people’s lives. Thus the part of the plan titled “Repairing the Social Safety Net” in fact calls for huge cuts in spending on Medicaid, food stamps, Pell grants, and so on—all of which will unquestionably damage the social safety net and make life harder for millions of Americans. This is about as disingenuous as calling a company’s downsizing initiative “Boosting Our Labor Force.” Reforming the welfare state is a reasonable goal. But when Ryan explains that he’s doing things like cutting Medicaid in order to help “the less fortunate get back on their feet” one hears echoes of Judge Smails, in “Caddyshack,” explaining that he sentenced young criminals to death because “I felt I owed it to them.”

Any doubt that Ryan’s choices are dictated by ideology rather than economics vanish when you look at one area of spending that he wants to increase: the defense budget. If you’re genuinely interested in fiscal responsibility, this is an untenable position. Annual defense spending has risen more than a hundred per cent since 2001, and it already constitutes more than half of all discretionary government spending. Countless analysts—including members of the military—have shown ways that the defense budget could be substantially cut without endangering national security. And the winding down of the wars in Iraq and Afghanistan provides a good opportunity to do so: after the Korean War, President Eisenhower cut defense spending by twenty-seven per cent; after Vietnam, Nixon cut it by twenty-nine per cent; and, after the end of the Cold War, the defense budget was cut by twenty per cent.

But Ryan will have none of this. And, despite his rhetorical obsession with “efficiency” elsewhere, he doesn’t even offer a substantive justification for why defense should get a free pass, or why national security requires us to spend four hundred billion dollars more each year than we did a decade ago. Instead, he relies on overblown rhetoric—cuts would “devastate” the military—and bad historical analogies. He argues that defense spending is smaller—as a percentage of G.D.P., and as a percentage of federal spending—than its Cold War average. That comparison makes no sense: we are no longer facing the might of the Soviet Union, and the major threats of today are not ones that new aircraft carriers and joint strike fighters are designed to combat.

Ryan’s uncharacteristic munificence toward defense requires his cuts elsewhere to be even more draconian, effectively starving most of the rest of the government to death. The C.B.O. analysis of Ryan’s plan, for instance, finds that, by 2050, all the government’s discretionary spending, including defense, would represent just 3.75 per cent of G.D.P. Given that defense spending in the postwar era has never been less than three per cent of G.D.P., and that Republicans won’t consider cutting it, the rest of the government’s discretionary spending would have to be squeezed out of that remaining 0.75 per cent. This is a derisory number—in the entire postwar era, it has never been less than eight per cent. In practical terms it would make most of what the federal government does—from maintaining infrastructure to air-traffic control, environmental regulation, and crime fighting—unaffordable. Ryan’s path to prosperity, in other words, is a path that ends with the federal government spending its money on health care, Social Security, and the military, and little else.

It’s true, of course, that this budget will never become reality; after all, the electorate likes most of the programs that House Republicans want to kill. The budget is, as many have said, an act of political theatre, a way for Republicans to demonstrate what they stand for. But that’s precisely what makes it so revealing: what Ryan is proffering here is something like the platonic ideal of a budget. And what his plans tell us is that there’s very little the federal government has done over the past hundred and fifty years, apart from fighting wars, that the House Republicans approve of. In that sense, the Ryan plan is not about fiscal responsibility. It’s about pushing a very particular, and very ideological, view of the proper relationship between government and society. The U.S. does need to get its finances in order. It just doesn’t need to repeal the twentieth century to do so. ♦

James Surowiecki is the author of “The Wisdom of Crowds” and writes about economics, business, and finance for the magazine.